The Idea That You Must Buy Isn’t As Strong As It’s Made Out To Be
A report from the American Statesman in Texas. “The receiver for struggling Austin developer StoryBuilt is asking investors for $2.5 million in new funding as the company attempts to avoid a financial meltdown. The request was made during an online conference call on Friday between StoryBuilt investors and Mike Bergthold, who is a managing director of Los Angeles-based Stapleton Group Inc. The Stapleton Group was court appointed as the StoryBuilt receiver. Bergthold said StoryBuilt would face ‘financial Armageddon’ if investors did not provide the $2.5 million, which he said would be used in part to hire an investment banker who could market the sale of StoryBuilt as a whole, or as individual properties. That, he said, would be far more favorable to investors than liquidating the company.”
The Pagosa Daily Post in Colorado. “I keep receiving emails from Realtors in Pagosa Springs, advertising significant price reductions for unsold existing homes. One example is an Archuleta home originally listed in May 2022 for $695,000. After six price reductions, the home was taken off market in August 2022 at $550,000. In July 2023, the existing home was listed again for sale for $450,000, and price reductions continue. The current list price is now $440,000… which is more than a 36% reduction off the original May 2022 listing price. I wonder if this existing home property, located on Bob’s Place, is a forced sell investor-owned STR property?”
“I looked on Airbnb to find some great STR deals … as possible examples of where Average Daily Rates (ADR) might be going in 2023. One example STR found is an entire home hosted by Evolve vacation rental property management. The property ADR was $336.00 per night. Fortunately, Airbnb is now advertising a price reduction from $287.00 per night down to $191.00 per night. Better yet, Evolve is now advertising a price reduction from $336.00 per night down to $176.00 per night. According to Evolve, the listed STR rental price is down by more than a 47%, a whopping $160.00 reduction in the per night rate. I suspect a current per night lodging rate dropping by more than 47% might indicate the ADR is doing the same?”
From Benzinga. “In a recent episode of ‘The Ramsey Show,’ Dave Ramsey delivered a straightforward message to a young woman from Orlando, Florida. Ramsey bluntly stated, ‘Ouch. You’ve screwed yourself. You’ve really made yourself a mess.’ This response came after the woman, identified as 28-year-old Selena, shared her recent financial decision to withdraw $26,000 from her 403(b) retirement account to fund a down payment for home construction, with the intention of accommodating her growing family’s needs. Ramsey’s reaction was laced with skepticism as he said, ‘I’m scared for you. I hope you get out of it with your skin intact, but I’m not positive you’re going to.'”
From Buzz Feed. “We recently wrote posts here and here where brides revealed why they called off their marriage on — or right before — their wedding day. In the comments, grooms also shared their stories of why they suddenly called off their weddings. Here are the shocking results: ‘We were together for seven years and were getting married in a few months. We’d already bought a house and started tying our lives together. She was emotionally distant for some time, but I ignored it like a fool in love. Eventually I noticed that she was spending significant time chatting with a guy she’d met on World of Warcraft. She was also taking phone calls ‘from a friend’ in private. I called her on it, and our wedding was called off the next day. We bought our house during the mortgage bubble, and now I’m stuck with an underwater mortgage on a house that’s lost 50% of its value. I also still have the ring. It’s been almost five years, and I’m still not sure what to do with it.'”
From Pro Publica. “When Noelle Geraci lost her job at a private investment firm this year, she did everything she could to protect her most important asset: the house she owns with her mother in a Las Vegas suburb. That same day she started applying for work and signed up for unemployment benefits. Then she called her mortgage company, Flagstar Bank. The bank recommended she apply to the Nevada Homeowner Assistance Fund, a pandemic-era program to help the unemployed with their mortgage payments. Under Nevada’s program rules, the assistance is paid as a loan that’s forgiven after three years if the homeowner stays in their house.”
“Then a foreclosure notice arrived in the mail. The money that was supposed to flow from the U.S. Treasury, through Nevada’s assistance program and to their bank hadn’t reached Flagstar. And Noelle Geraci couldn’t get anyone to explain what was going on. ‘It’s a complete nightmare,’ she said. ‘My mom is a senior. Me losing my job has impacted us in a severe way. The one and only thing we have is our home. Everything we have is about to be gone.’ Shirley Geraci panicked. ‘I don’t want to lose my house,” she told ProPublica soon after the notice arrived. ‘I don’t want to end up in an apartment and lose everything we built. It’s our investment,’ she added.”
The Real Deal on New York. “Blackstone unwound itself from a struggling multifamily portfolio and the threat of foreclosure last week, selling off a majority stake in 11 Manhattan buildings where rising rates had whacked revenues. Buyer Atlas Capital Group scored a 51 percent interest in the properties for $142.4 million, PincusCo first reported. A Blackstone spokesperson confirmed the purchase price that also included $90 million in mezzanine debt. ‘The sale basically means Blackstone had decided to move on,’ a broker said. ‘Atlas controls the ownership and it bought the loan so it can take the properties pretty quickly.'”
“Brokers extrapolated the $142 million purchase price for a 51 percent stake to peg the portfolio’s total value at $278 million — a 43 percent decline from the $487 million Blackstone had paid in 2015. PincusCo’s back-of-the-envelope math arrived at the same result. That decline would mean the equity in the deal had been wiped out and the buildings were worth just $7 million more than the senior debt.”
The New York Post. “Times Square is looking a lot like its bad old self, with vagrants, boozy migrants, junkies, and scofflaws making the Crossroads of the World look more like the third world. On three separate days over the past week, The Post saw junkies brazenly smoking crack pipes on West 43rd Street, drug dealers peddling their wares within eyeshot of cops, hobos conked out wherever they can find a spot, and scores of aimless migrants loitering the day away. Long Island native and Lower East Side resident Joe Massaro, 39, didn’t mince words when summing up the current state of Times Square: ‘It’s a sh-thole around here.'”
“The nonprofit responsible for the upkeep and improvement of Times Square recently pushed for the managers of the nearby migrant shelters to increase their outdoor security patrols — and to take out their own trash. But the amount of trash the shelters produce, and who has to deal with it, are still prevalent problems. ‘They’re are making a lot of money catering to this crisis, and they need to make sure that they maintain their building. It’s not the city’s responsibility to make sure that the outside of these buildings is clean, it’s the building manager’s,’ said Tom Harris, president of the Times Square Alliance.”
The Globe and Mail. “One of Canada’s major mortgage insurers has stopped disclosing numbers about the riskiest part of its balance sheet, where it has guaranteed mortgages for borrowers who now owe more than the value of their home. Until the first quarter of this year, Canada Guaranty Mortgage Insurance Co. disclosed the share of loans it guaranteed for borrowers who had a loan-to-value (LTV) ratio greater than 100 per cent. Also known as an underwater loan, it means the principal of the loan is greater than the home’s market value.”
“In Canada Guaranty’s 2023 data reports, the metric is absent. Today, the highest LTV ratio it now discloses is for loans with an LTV above 95 per cent. These disclosures show its riskiest loans have more than tripled over the past 12 months. The change in disclosure comes after The Globe and Mail published an article showing how Canada Guaranty and the other two mortgage insurers were increasingly guaranteeing underwater loans. The rapid rise in interest rates over the past year and a half has triggered a drop in home prices. It has also increased the cost of mortgages. These two factors – falling home prices and expanding loans – have increased LTV ratios. In some cases, these shifts have pushed homeowners underwater.”
“That stress can be seen in most of the big Canadian banks’ financial statements. Borrowers with amortizations greater than 30 years accounted for more than one-quarter of their residential loan books, according to their results for the second quarter ended April 30.”
From CNBC. “The Bank of England’s losses on bonds bought to shore up the U.K. economy after the financial crisis will be ‘materially higher than projected until the middle of the decade,’ according to Deutsche Bank. In late July, the central bank estimated that it would require the U.K. Treasury to backstop £150 billion ($189 billion) of losses on its asset purchase facility (APF). The program ran from 2009 to 2022 and was designed to improve financing conditions for companies hit by the 2008 financial crisis. It saw the BOE accrue £895 billion worth of bond holdings while interest rates were historically low. However, the central bank began unwinding that position late last year. Higher rates have driven down the value of the purchased government bonds — known as gilts — just as the BOE began selling them at a loss.”
“Imogen Bachra, head of U.K. rates strategy at NatWest, said the hit to public finances — and therefore to the government’s coffers — is two-fold. ‘On one hand, QT loses money because the Treasury takes the BoE’s losses when gilts are sold at a lower price than paid. This was expected: the BoE bought bonds in a falling rate environment due to disinflation, while ‘success’ was to be defined by reflation and so higher rates,’ Bachra said. On the other hand, though, while QE gilts are not sold, the BoE pays Bank Rate on the ~£900bn reserves it created to buy them. The higher Bank Rate rises, the more costly this interest expense becomes.'”
Stuff New Zealand. “People who are buying homes are committing more than twice as much of their income to their repayments as they would if they were renting, on average, new data shows. And one economist says it raises questions about the benefits of buying. In Auckland, renters were paying 19% of income, and in Tauranga 29%. Those who bought a home were paying 55% of the average household income in mortgage repayments in Auckland, and 65% in Tauranga. Christchurch had a rent-to-income ratio of 21% compared to 18% in Wellington, and required 43% of average income for mortgage repayments, compared to 42% in Wellington.”
“Infometrics chief executive Brad Olsen said he hoped the past couple of years would have changed people’s perception that house prices would always go up. He said, looking at the data on the proportion of income required for rent compared to a mortgage, ‘part of you thinks why does anyone buy? When you eyeball those long-term average figures, you think do I want to pay 38% of my average income to repay a mortgage, or 21% for pay rent? It highlights the idea that is sometimes pushed forward that you must buy isn’t as strong as it’s made out to be.'”
South China Morning Post. “If you ask small-business owner Bill Ye, the writing was on the wall for China’s embattled property sector long before Country Garden said its net losses in the first half of this year could reach 55 billion yuan (US$7.6 billion). For the past two years, the owner of a relatively small piling company says he has been trying to collect more than 200 million yuan owed by the world’s most indebted property developer – China Evergrande Group. All the while, his own unpaid workers, investors and suppliers are angrily clamouring for tens of millions owed to them – showing how the crisis has trickled down and hit the entire industry.”
“It wasn’t too long ago that times were great. Ye, now in his early forties, started the piling company in southern China in 2010 and was able to capitalise on China’s post-financial-crisis construction boom. For Ye, the future looked especially bright in 2017, when he scored a partnership with property giant Evergrande. But the good times would not last. ‘A huge number of suppliers for developers, like me, have been deeply trapped by the crisis,’ Ye said, lamenting that the vast majority of his wealth has been wiped out in just two years.”
“Fears have spread that pre-sold homes might not be completed, due to the slow progress. China Business News, a state-backed newspaper in Shanghai, reported that only a third of unfinished pre-sold homes identified in September 2022 had been completed as of May this year. The current downturn in China’s real estate sector is caused by government policies, not by the real estate sector itself, said Yao Yang, a Chinese economist, while speaking at a public forum in Shenzhen last week. ‘Now the debts are hanging in the air. Some big companies are too big to fail, but it’s leading to their suppliers being dragged to death.’ Yao was quoted as saying.”
“Zheng, who is also in the piling business, has similarly seen his fortune plunge amid the property crisis. To make matters worse, his credit standing took a hit because he defaulted on payments to third parties, meaning he is now restricted from borrowing money, using a credit card or even buying an air ticket, according to China’s social credit system. ‘I used to be a successful, private entrepreneur,’ Zheng said. ‘But now I’m making preparations for the worst – going bankrupt personally and corporately.'”
“The two piling entrepreneurs, Zheng and Ye, expressed doubts that the newly introduced policies will have a practical effect, and they were concerned that enforcement and governance are fraught with arbitrariness on the ground. They fear that, if the Country Garden crisis deepens, it could strike a big blow to market confidence and debt chains among the country’s developers and their suppliers. ‘There is a serious surplus of houses, especially in fourth- and fifth-tier cities. Besides, everything is unknowable ahead, like how much property prices will fall, in which direction policies will change, and whether the business environment for private companies will continue to deteriorate,’ Ye said.”
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‘It’s a sh-thole around here’
That’s what I’ve been saying Joe.
‘The nonprofit responsible for the upkeep and improvement of Times Square recently pushed for the managers of the nearby migrant shelters to increase their outdoor security patrols — and to take out their own trash. But the amount of trash the shelters produce, and who has to deal with it, are still prevalent problems. ‘They’re are making a lot of money catering to this crisis’
Yes they are Tom, and there are thousands of these bum and illegals ‘advocates’ lined up at the pig slop. Every incentive is toward making things worse. Ban narcan!
Times square is going back to what it looked like in the 70s and the 80s; a POS place for druggies and nudie movies.
Meanwhile, the guy who cleaned it up last time is getting mug shots taken in Georgia. This is getting ridiculous.
The worse things get, the more money these non-profits get. So what’s their incentive to improve things?
‘One example is an Archuleta home originally listed in May 2022 for $695,000. After six price reductions, the home was taken off market in August 2022 at $550,000. In July 2023, the existing home was listed again for sale for $450,000, and price reductions continue. The current list price is now $440,000… which is more than a 36% reduction off the original May 2022 listing price. I wonder if this existing home property, located on Bob’s Place, is a forced sell investor-owned STR property?’
I’ve posted hundreds of examples of this movie.
‘One of Canada’s major mortgage insurers has stopped disclosing numbers about the riskiest part of its balance sheet, where it has guaranteed mortgages for borrowers who now owe more than the value of their home’
K-da doing what it does best: lie to themselves and cover up the lies even if it violates the law. Remember years ago when they called mention of foreign buyers racist? Oh we got fearsome money laundering laws.
So how many people have been tried for money laundering? Well, none, but the laws exist! Same thing with Australia.
‘‘A huge number of suppliers for developers, like me, have been deeply trapped by the crisis,’ Ye said, lamenting that the vast majority of his wealth has been wiped out in just two years’
Sux to be you Ye.
*”Bergthold said StoryBuilt would face ‘financial Armageddon’ if investors did not provide the $2.5 million, which he said would be used in part to hire an investment banker who could market the sale of StoryBuilt as a whole, or as individual properties . . . ”
oh brotherrrrrrr! so, either pour more GOOD money after BAD or else the whole thing collapses?! err, yeah, sure.
why, sign me right up to pay big $ to the same type of person/behavior/strategy that got you INTO this mess.
“In for a penny, In for a pound” but $2.5mil. is rather posh.
hell, give me jingle: $50 flat fee, and that INCLUDES the lamp post flyers, neon car windshield signs, PTA newsletters & crazy Craigslist spam. guerilla marketing. yo!
sorry, I draw the line at Facebook Marketplace.
I do have some standards.
“Times Square is looking a lot like its bad old self, with vagrants, boozy migrants, junkies, and scofflaws making the Crossroads of the World look more like the third world”
See also: HBO original series The Deuce.
but but but there are no flashing neon lights pour nooo shops anymore……
Associated Press Coverage of Courts, Climate Bankrolled by Dozens of Left-Wing Foundations
Billed as purveyor of ‘unbiased news,’ wire service strikes lucrative sponsorship agreements with progressive charities
The Associated Press, the country’s top wire service, is now bankrolled in part by millions of dollars from left-wing foundations, including one founded by “1619 Project” author Nikole Hannah-Jones.
The news organization last year announced a series of “partnerships” to subsidize reporters covering climate change, race, and democracy. A review of the donor roster shows that the vast majority fund left-wing political causes, while none are supporters of conservative initiatives.
The Ida B. Wells Society, founded by “1619 Project” lightning rod Hannah-Jones, has teamed up with filmmaker Steven Spielberg’s Hearthland Foundation, for example, to foster “more inclusive storytelling” at the Associated Press.
In some ways, it was a natural partnership: The AP’s global investigations editor, Ron Nixon, serves on the Ida B. Wells Society’s board of directors. In others, it may prove more problematic, given that Hannah-Jones’s own reporting has been disputed by historians, who have argued—among other things—that her account of the motivations of the American revolutionaries is factually inaccurate.
The funding, much of it from these sorts of overly political actors, will make it more challenging for the Associated Press to swat away accusations of political bias. In one high-profile example, critics blasted the organization for revising its style guide to instruct reporters to avoid the use of terms like “the French,” which the AP indicated was “dehumanizing.”
AllSides, a group that tracks media bias across the industry, last year changed its rating for the AP from “center” to “leans left,” citing what it said was an increase in “word choice bias” and “bias by omission of views” in its coverage. AllSides says it closely monitors the Associated Press’s content because the AP’s content is “broad and far-reaching.”
The Associated Press is also taking nonprofit money to fund coverage of race and climate. The organization’s “democracy journalism initiative,” a division whose reporters cover “the intersection of race and voting,” is bankrolled by nonprofits such as the Jonathan Logan Family Foundation. That organization also funds Stacey Abrams’s New Georgia Project and the left-wing activist group Take Back the Court, which advocates for expanding the Supreme Court.
A recent AP article on the topic asserts that the Supreme Court in a 2013 landmark decision “tossed out the heart” of the Voting Rights Act, when in reality the Court ruled that nine southern states would no longer have to “pre-clear” election law changes with the federal government. The AP lamented in another story that “far-right conservatives” in Tennessee were elected to city council seats. A February news report said that “GOP election tactics” intentionally disenfranchised black voters in Wisconsin.
Though the Associated Press is funded largely by subscriptions from the thousands of news organizations that pay to license its content, its donors shell out millions to subsidize coverage of some of the country’s most divisive political issues. It is unclear when the AP began entering such partnerships, but they have proved lucrative in recent years.
The Charles Stewart Mott Foundation, for example, provided $500,000 in 2022 to the Associated Press’s “democracy journalism initiative.” The foundation recently blasted the Supreme Court decision to overturn affirmative action, saying the decision “impedes colleges and universities from selecting their own student bodies and fully addressing systemic racial inequalities that persist.”
The William and Flora Hewlett Foundation spent $2.5 million on the AP’s climate and education reporting verticals and sent $400,000 to its democracy journalism initiative. The foundation also funds Planned Parenthood and organizations such as Advocates for Youth, which promotes transgender ideology to kindergartners.
The AP takes in millions more from philanthropies—the Hewlett Foundation, Walton Family Foundation, and others—to fund reporting on climate change, such as stories that this summer’s heat wave is due to global warming, that President Joe Biden’s Inflation Reduction Act boosted America’s “climate credibility,” and that climate activists have ramped up protests against the “emissions-spewing lifestyles of the ultrawealthy.”
The Rockefeller Foundation, one of the country’s largest private philanthropies, in 2021 awarded the Associated Press $750,000 for a climate change initiative to increase reporting “on the increased and urgent need for reliable, renewable electricity in underserved communities worldwide.”
The Outrider Foundation has donated in a bid to help the AP beef up its coverage of climate change and nuclear weapons. Outrider has embraced an apocalyptic view of both issues. In recent years, the foundation launched an app that simulates the effects of a nuclear detonation. One of its advisers is Michael Mann, the climate researcher behind the controversial “hockey stick” graph, which claims global temperatures spiked dramatically around 1900 due to manmade global warming.
The Public Welfare Foundation, which gave the Associated Press a $200,000 grant this year for investigative reporting on crime issues, funds organizations that supported legislation in Washington, D.C., to drastically reduce penalties for various crimes.
Associated Press spokeswoman Nicole Meir told the Washington Free Beacon that the organization maintains “complete control” over content produced through its philanthropic partnerships, and that “no funder has any influence over AP journalism.”
https://freebeacon.com/media/associated-press-coverage-of-courts-climate-bankrolled-by-dozens-of-left-wing-foundations/
Associated Press spokeswoman Nicole Meir told the Washington Free Beacon that the organization maintains “complete control” over content produced through its philanthropic partnerships, and that “no funder has any influence over AP journalism.”
– My BS detector flashing red now!
“He who pays the piper calls the tune.”
– This idiom dates back to the 17th century. Probably from the Pied Piper of Hamelin. Seems apropos.
– I smell a rat.
It’s the Golden Rule.
“He who has the gold makes the rules”.
Don’t quote laws to men with swords. – Pompey
The head-scratching rally in VinFast Auto Ltd. shares came to a sudden halt on Tuesday, erasing $83 billion of market value. The unprofitable and thinly traded maker of electric cars tumbled 44% in New York, snapping a six-day winning streak. It had been rising faster than any other large-cap stock worldwide, jumping 688% from its debut in a SPAC listing on Aug. 15 through Monday’s close.
Despite the wipeout, VinFast’s nearly $107 billion market capitalization still makes it larger than companies like BlackRock Inc. and FedEx Corp.
The last time a stock with a tiny free float rose from relative obscurity to the ranks of the world’s largest companies, it didn’t end well for investors. AMTD Digital Inc., another US-listed company with roots in Asia, baffled market veterans a year ago by soaring more than 32,000% in the span of a few weeks. The money-losing financial services company’s paper value at one point reached over $400 billion, exceeding that of JPMorgan Chase & Co.
AMTD has since tumbled more than 99%, hitting a record low last week. Its valuation now stands at a humble $1.1 billion.
https://finance.yahoo.com/news/world-hottest-stock-evokes-memories-085559913.html
“Unprofitable and thinly traded … VinFast’s nearly $107 billion market capitalization still makes it larger than companies like BlackRock Inc. and FedEx Corp.”
I’ve never heard of this company, and yet they’re bigger than Porsche, LG (appliances), CVS, and CSX (rail). We have no fundamentals anymore.
Nice little website that ranks a company’s vitals: https://companiesmarketcap.com/
A reader sent these in:
Credit will be a bloodbath in 2024. The real economy will begin to slow notably as the consumer adjusts to the end of Student loan deferrals and various COVID era fiscal transfers along with sky high credit card and mortgage rates.
https://twitter.com/Stimpyz1/status/1696583709632369093
WALMART IS ASKING PHARMACISTS TO TAKE WAGE CUTS AND REDUCE HOURS WORKED TO SAVE COSTS -SOURCE
https://twitter.com/DonMiami3/status/1696576405276885065
Been saying this repeatedly, first batch of bad news => relief in rates => eases ERP anxiety. But beyond the first 30/40 bp of drop in rates, recession anxiety will kick in and kick everyone in the teeth
https://twitter.com/INArteCarloDoss/status/1696551937318006822
North Carolina furniture company Mitchell Gold + Bob Williams has closed permanently today, leading to the layoffs of 533 people
https://twitter.com/DonMiami3/status/1696570805860143280
How best to describe unoccupied Airbnbs not cash-flowing? Shall we whip out e- thesaurus? And how best to incorporate the impact of 48% of companies surveyed by @ZipRecruiter reducing pay this year? Do falling incomes factor into future vacancy data?
https://twitter.com/DiMartinoBooth/status/1696566679227035764
If you bought a house in the last 2.5 years in Canada, the best case scenario if you were to sell right now would be breaking even.
Sky’s the limit for worst case scenario. Remember that next time you hear “now is a great time to buy”
https://twitter.com/JonFlynnREstats/status/1696208091325317258
Over the last 3 months, 2.55 million job openings have been erased…Largest 3-month decline on record. Would be a real shame if people celebrated too early and forgot about lag effects.
https://twitter.com/Stephen_Geiger/status/1696526529382285441
Cost of homeownership is far more than just principal and interest. Nobody has locked in insurance premiums. “Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost”
https://twitter.com/MichaelKantro/status/1696310496461201850
JOLTS JOB OPENINGS: 8.827MM, PREV 9.165MM, EXP. 9.5MM
https://twitter.com/DonMiami3/status/1696524148468769248
Interesting to a few is that while we are told by all “credible RE sources” that we have a housing shortage…there are more housing units under construction than any time in the last 3+ decades…against the lowest population growth since WWII. And amid that surge of housing vs trickle of population growth…housing prices soared. Now there are more housing units being created than people to fill them!?!
https://twitter.com/Econimica/status/1696230236613165510
Builder in Texas today…“Red Alert – sales have tanked over the past two weeks.” Buyers are tossing out crazy low offers and feel like it is a complete buyer’s market. The “odd” thing – existing homes are only at a 3 months supply in his market… historically healthy. BUT It isn’t healthy when demand is as low as it is right now. Rate buy-downs still help, but increasingly less so each month we go further into the year.
https://twitter.com/koakley81/status/1696308871659200527
Slowly creeping up to 6% 😵😵
https://twitter.com/geoeconomic10/status/1696185160813674754
GenZ student loan borrowers with an English degree and $107,500 balance thinking they can just not repay the debt
https://twitter.com/DonMiami3/status/1696292505677902086
⚠️Real Estate prices are now selling about -7% 📉 below the listing price. •This is the First time this happened over the past decade (2012 last time). Both listing and sales prices are down on YoY basis.
https://twitter.com/1CoastalJournal/status/1696162472820965460
That’s a lot of balance sheet right there.
https://twitter.com/IvanTheK/status/1695098786043863087
The US economy avoiding a recession…
https://twitter.com/dougboneparth/status/1696626314667536400
Latest job opening numbers (JOLTS) surprise to the downside. Per @zerohedge “The 3-month drop in job openings was 1.5 million, the 2nd highest on record surpassed only by the total economic shutdown during the covid crash” More data showing the lag effect is indeed arriving…
https://twitter.com/menlobear/status/1696549897225523457
Story of 2023 been a story of investors getting caught wrong footed in their positioning. Everyone was positioned for a recession early 23 then got slammed with the #bigflip. Then everyone positioned for H4L and got slammed with SVB. Then everyone positioned for a credit collapse led recession and got slammed with higher growth. Now investors are positioned for H4L for the pessimists and Higherer for Longerer for most. My bet is they get slammed again. 2023: wanna make money? take the other side.
https://twitter.com/INArteCarloDoss/status/1696549145178247359
“Buyers are tossing out crazy low offers and feel like it is a complete buyer’s market.”
The nerve!!
It’s more than just a feeling bro.
How about when sellers were tossing out crazy high listing prices?
Re: “You’ve screwed yourself. You’ve really made yourself a mess.”
It is so easy to righteously blame the victims of a fraud but somehow one never hears anybody blaming its perpetrators who, with their insane LIRP scams, had goosed them into making these decisions not only get off scot-free but are also put in charge of cleaning up the very same mess they themselves had created . . .
Dave Ramsey has become insufferable. He still thinks it’s 1995, when $1000 was enough for an emergency fund, the worst debt was $10K on a CC, you should be able to buy a house on a 15-year mortgage with 20% down (in Nashville), and the rest can be solved with a little beans and rice and rice and beans. Now he’s getting old and he’s trying to coattail his business off to his kids and a couple friends, and public isn’t buying his schtick anymore.
The $26K is the least of the caller’s problems.
LIRP
?????
H4L was bad enough.
Low Interest Rate Policy (make that idiocy) . . .
I understood ZIRP. Appreciate the clarification. I’m awash in acronyms across fields.
Then to add to your misery here is NIRP (Negative Interest Rate Policy) invented by the denizens of a parallel universe where the landlord pays rent to the tenant, where holding one’s nose an inch below water makes to perceptible difference from holding it an inch above it, which Europe actually tried for a while and was surprised when it backfired big time and which our own experts too made some noises about . . .
“Bergthold said StoryBuilt would face ‘financial Armageddon’ if investors did not provide the $2.5 million, which he said would be used in part to hire an investment banker who could market the sale of StoryBuilt as a whole, or as individual properties. That, he said, would be far more favorable to investors than liquidating the company.”
Dumb question: Why is a fire sale as a whole or carved up into chunks expected to be at least $2.5 million more profitable than liquidation? It seems like a going-out-of-business sale either way…
Wanna bet that Bergthold has the hots for the “investment banker?”
10% finders fee?
It’s become a stink at the U.S. Open: a pungent marijuana smell that wafted over an outer court, clouded the concentration of one of the world’s top players and left the impression there’s no place left to escape the unofficial scent of the city
https://www.yahoo.com/news/snoop-doggs-living-room-smell-224554503.html
“…clouded the concentration of one of the world’s top players…”
The schitt is getting so deep that I have to wear irrigator boots.
Whoever “reader” is, thank you again! Keep it coming. 👍🙏
“Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost”.
Not even an option for borrowers. You have to have evidence of insurance before you close. And many lenders require an impound account which puts the paying of premiums in the lenders hands. Better be a cash buyer or own your house free and clear if you want to gamble this way.
Not even an option for borrowers.
And “forced place insurance” is usually much higher than market price home insurance
Bubble warning indicator: My lovely wife expressed audible consternation on seeing the San Diego Union-Tribune headline documenting that the median San Diego home price is nearing $1 million.
Accelerating price increases on plummeting volumes is a reliable harbonger of a near-term crash.
harbinger (shouldn’t type with my thumb…a bad habit)
Orange County Register
BusinessNews
SUBSCRIBER ONLY
Southern California home prices near record high despite sales plunge
The median price of a Southern California home hit $743,000 in July, just $7,000 shy of the region’s all-time high, new CoreLogic figures show.
By Jeff Collins | JeffCollins@scng.com | Orange County Register
PUBLISHED: August 29, 2023 at 7:00 a.m. | UPDATED: August 29, 2023 at 10:37 a.m.
…
https://www.ocregister.com/2023/08/29/southern-california-home-prices-near-record-high-despite-sales-drops/
Does the shrinking US money supply concern you?
Why the US money supply is shrinking for the first time in 74 years
Published on 28 AUG 2023
The U.S. money supply is shrinking for the first time since 1949, as savings deposits decline and the Federal Reserve shrinks its $8 trillion balance sheet. The drop stems mostly from changes in Fed policy and rising interest rates, but it says little about the prospects for inflation or the likelihood of recession, according to Goldman Sachs Research.
…
https://www.goldmansachs.com/intelligence/pages/why-the-us-money-supply-is-shrinking.html
Shrinking money supply is the opposite of inflation, by definition.
Are you worried that stocks may plunge, once investors price in the risk of recession plus the attractive option of 4%+ risk-free Treasury bond yields?
Expect stocks to plunge at least 10% once investors price in the risk of recession, one strategist says
Theron Mohamed
Aug 30, 2023, 5:45 AM PDT
Stocks could plunge by 10% or more once investors start pricing in the risk of recession, Key Advisors’ Eddie Ghabour says.
Brendan McDermid/Reuters
– Stocks could plunge 10% or more once markets price in the risk of recession, one strategist says.
– The Fed will likely tank the economy if it pursues 2% inflation, Key Advisors’ Eddie Ghabour says.
– Ghabour sees signs of resurgent price growth and weakness among American consumers.
Stocks may plunge by 10% or more if the Federal Reserve forges ahead with its inflation fight and throttles the economy, one strategist has warned.
“You normally will see a double-digit drop … when the market finally prices in the recession,” Eddie Ghabour, CEO of Key Advisors Wealth Management, told Yahoo Finance on Tuesday. A 10% decline would erase a big chunk of the S&P 500’s 17% advance this year.
Inflation has slowed from a 40-year high of over 9% last summer to around 3% in June and July. However, it won’t be easy for the Fed to curb price growth to its 2% target, Ghabour said.
“The only way you can get there is by demand destruction,” he said. “I don’t see how you can get that rate of change to drop that much by next year without a recession.”
…
https://markets.businessinsider.com/news/stocks/stock-market-outlook-recession-risk-inflation-ghabour-fed-interest-rates-2023-8
Axios Homepage
Aug 29, 2023 – Economy & Business
Why the stock market isn’t paying you much right now
Matt Phillips, author of Axios Markets
For the first time in years, bonds are paying a decent, after-inflation return, and that presents a challenge to the logic of owning stocks.
Why it matters: It could become a headwind for the stock market.
The big picture: At the risk of oversimplifying, all investors face a variant of this basic choice: stocks or bonds?
One way investors decide where to put their money is by comparing the expected returns on these two cornerstone investments.
State of play: Over the last year or so, the Federal Reserve’s interest rate hikes have translated into higher yields, and higher returns, for bond investors.
Investors can now lock in a decade of real (after inflation) risk-free annual returns of almost 2% on their money, simply by buying 10-year inflation-protected Treasuries.
…
https://www.axios.com/2023/08/29/interest-rates-stocks-bonds-returns
I think those praying for lower rates are worried stocks won’t plunge. It’s the big conundrum; everything sucks yet stocks remain high. That one has got Powell spinning.
Jordon Peterson in a recent podcast in summary said his experience with AI is that it lies about 20 % of the time.
Hollywood is putting out a movie next month called “The Creator.”
The plot is that in the future AI sets off a necular bomb in Los Angeles and the war in on between humans and A1/Robots.
But, in regards to the future, the Globalists plan to eliminate 40 to 50% of the jobs of humans with AI, and future plans of the Globalists is a World run by AI in which humans are under this AI superior intelligence control. Klaus Schwab said, ” Whoever controls the technology will Control the World.”
The 2030 UN sustainable earth agenda is a plan of changing the nature of existence for human populations, based on a Elite Group of Stakeholders saving the World from human Co2 emissions, crops and animals and fossil fuels.
All these organizations and Private Parties trying to push a narrative of justification of a One World Order in collusion with Governments to eliminate all that sustains humans currently.
The truth is that the 2045 goal of ZERO co2 carbons would turn earth into a browned out mars type uninhabitable rock.
Cutting crops and meat by 30 to 40 % in immediate future would create mass starvation and cutting fossil fuels for unsustainable solar and windmills would be a disaster of epic porporations.
But, the scheme for the under 1% to take over the World, and control all resources based on “Climate Change Emergency” is the great narrative that they claim is settled science.
First, they claim to know what the weather and temp will be in 50 to 75 years, based on their models, when no increase of earth temp has occurred since 1998. Also, historically warming was a prosperity period for earth in terms of greater production of crops.
They act like climate change isn’t a natural occurrence on earth and co2 isn’t needed for life.
This is a ridiculous fraudulent narrative they dreamed up to justify enslaving, controlling and depriving humans of life, liberty and pursuit of happiness. A scheme to take over the World by a One World Order insurrection by the under 1% .
No dispute allowed to this ridiculous Climate Change Emergency, just as no dispute was allowed to the lock down of the globe over Covid with expiermental fake vaccine being the only solution.
As it is evident that a monopoly of mega Corporations, Banks, Big Pharmacy, Rich Elites , the United Nations have inflitrated global governments to partner in this anti-humanity attack on human race.
This Cult of psyopathic fraudsters has unleashed their One World Order/ great reset that would be worse than 1984.
Its not credible that its valid that a solution would be make people comply to mass genocide, forced vaccines,forced hacking, Banks controlling consumption, forced bugs and fake food, you will own nothing and be happy living in 15 minute city . prisons.
Could a candidate for election ever get the vote of the people on such a mandate, unless the vote was rigged? This is a forced agenda by the masterminds of a Great Reset thats nuts, reckless and dangerous.
So, strange that no valid discussion is allowed about these absurd fraudulent narratives, including a cover up of the fake vaccine death and injury.
So, I submit that our Goverment has already been captured, because if we had a valid Government those fake vaccines would be off the market, with the culprits held accountable for this massive harm to the public.
Its up to the people now to stop this power grab by this evil Cult of power that is a clear and present danger for populations of the World.
So, I submit that our Goverment has already been captured, because if we had a valid Government those fake vaccines would be off the market
Instead, we are now left wondering what sort of mandates will they try to shove down our throats this time. I’m sure they will word the Executive Orders more carefully this time to make it harder for judges to strike them down. For all we know they’ve already been written and they’ve been waiting for the next variant that gains traction, even if the symptoms are minor.
In addition…
IMHO, the One World Order power grab is distracting the public with the Transgender assault, racism, high crime, white terrorists, etc., while bigger issues are not discussed.
Right in front of our eyes you have the WEF leader Klaus Schwab and his mega Corporation merry men saying what their plan is to take over the World in partnership with governments.
In a sane World, this Globalists Cult of monopoly Corporations and the parties that collude in this power grab would be called out for waging war on the Globe to take over the world and enslave the over 99%.
What we get instead is a narrative that a political party and Trump voters probably 50 % or more of US population are the insurrectionist terrorist. We get Biden saying that the US should lead in the One World Order, while he sneaks around giving up all our rights by Treaty to the UN World Health Organization.
And they are moving in to control all media narratives and information and control any free speech. AI will be used to filter information allowed, don’t doubt that.
So, whatever semblance of the prior world we lived in has been highjacked by a unleashed invasion by this Cult of Powers, literally on a planned timeline attack on human civilizations of the World.
This shocking invasion of the free world by this Cult of Wealth and Power is hard to believe, yet they are openingly disclosing their end game adgenda of world takeover.
And the outright evil of the end game adgenda of these entities is unbelievable , yet they tell you what their plans are, while they have exalted AI/Robots as the new replacement.
As usual , they also want you to be distracted by War, scared by latest virus, or willing to give up everything because of Climate Change, a fraudulent hoax of anti science.
So, its like 1776 again ,but this time the tyranny planned is worst than taxation without representation , its genocide and slavery of the free world by this group of devils on earth.
In a sane World, this Globalists Cult of monopoly Corporations and the parties that collude in this power grab would be called out
That the BRICS are growing in number could be an indication that most of the world is rejecting the WEF and the West in general.
Im sorry that I keep bringing this up, but unless its acknowledged that war has been launched against humanity, and people don’t rebel against this ridiculous One World Order , humanity will be held hostage to their inhumane and ridiculous power grab.
Look at the Mega Corporations and people who belong to the WEF, and the Corrupt UN and guys like Bill Gates as being Entities that want to make you eat bugs, and they own everything and they basically want to kill most of us.
This group of evils has been planning this for over a century and they were just waiting for the kind of technology where they could pull it off.
Colorado,
I appreciate that you take these threats to humanity seriously .
I have always said that the biggest obstacle to this hijacking of world by evils is that its even believable by people.
No, the government wouldn’t lie to you and Goverment is here to save you while colluding with Money powers that want to enslave you or kill you.
Of course Im concerned about having to flee California if they mandate a poison vaccine, which could happen, or be put in prison. I have fear of being cut off from food if I don’t comply, which could happen.
This enemy is not going to stop unless the people stop them, because Governments arent going to stop them.
While its such a shocking unbelievable plot that this kind of war is being launched on civilization, the evidence adds up thats its true.
There is a lot of propaganda against countries that resist. We are repeatedly told that they are on the verge of collapse, and while there is no doubt they have big problems to solve, we also have our own problems which continue to spiral out of control: deficits, pubic and private debt, inflation, homelessness, drug abuse, an unguarded border, etc.
Major Media Plans a Massive Collusion-fest to “Get their Stories Straight” on Climate Change
https://wattsupwiththat.com/2023/08/30/major-media-plans-a-massive-collusion-fest-to-get-their-stories-straight-on-climate-change/
The Columbia Journalism School of New York City has announced a media seminar “Climate Changes Everything – Creating a Blueprint for Media Transformation” to be held September 21 and 22, 2023. The tagline for it reads: “Join leading journalists from around the world for an unprecedented conversation about how to cover a world on fire.”
They start out with a lie, the world isn’t “on fire” at all. To say this sort of media collusion to “get their stories straight” on climate is wrong, would be an understatement. This seminar violates virtually every principle as defined by the American Press Institute in their “The elements of journalism” definitions, especially the tenet “Its practitioners must maintain an independence from those they cover.” With this sort of collusion, independence on the topic of climate change essentially disappears.
The press release for it, from their webpage, is below:
Reporters, editors, and news executives from Agence France-Presse, the Associated Press, CBS News, Puerto Rico’s Center for Investigative Journalism, France Télévisions, the Guardian, South Florida’s NBC 6, NowThis, Telemundo, TIME, The Times of India, and The Weather Channel — among many other outlets, large and small — will join with hundreds of colleagues to chart a course for tackling the climate story in ways that drive attention and impact while highlighting solutions and justice.
Hear from newsrooms innovating to meet the moment: How can news outlets everywhere treat climate change as a story for every beat, not just silo it on the weather desk?
Discuss whether news outlets should still take fossil fuel advertising, and how journalists can grapple with climate disinformation.
Look ahead to 2024 elections that will have profound implications for global climate action. How can journalists make those implications clear to voters, refute misinformation, and hold candidates accountable?
Learn from journalists covering and living in frontline communities how to highlight climate justice in our reporting.
Recognize that telling the entire climate story means not just including solutions — but interrogating those solutions, so the public and policymakers know which ones actually work.
Plus, get a front row seat to interviews with special guests and global climate luminaries.
CLIMATE CHANGES EVERYTHING will be a participatory event, with networking breaks, a town hall, and working sessions on key conference themes.
We’re at a moment of historic opportunity for journalism. Climate coverage around the world is better than ever, but so much more is needed: more energy, more creativity, more commitment. Let’s forge a path forward, together.
Despite decades of coordinated effort by the most-powerful media outlets in Western society, voters still put “climate change” dead last of their priority list in polls. That is something significant that the media is ignoring with this new push. Or, perhaps it worries them.
It could be the progressive elites that control global information are so worried that voters “simply don’t care” enough about climate that they feel the need to redouble their coordinated efforts to hyperbolize the climate crisis. This arguably good news, suggesting that efforts like those undertaken daily at Climate Realism, WattsUpWithThat, and many other climate realist efforts for the past three decades have not been in vain. This principled and often lonely work of climate realists to speak truth to power has been effective, at least when you compare it to the sort of budgets these media giants have.
The low-funded David has struck the massively funded Goliath … if not with a kill shot, at least one that wounded him and got him worried that he might lose. The bravery of climate skeptics worldwide has proven more powerful than media because we have the truth on our side. Why? Because of what Goliath didn’t expect from us: climate skeptics have the courage to say the truth, and never stop no matter the cost.
While the Media writes about the supposed “consensus” and “settled science,” climate realists point out that consensus is a political, not scientific term and that science is never “settled.” On the question of catastrophic climate change, following the scientific method, testing theories against data, indicates that no such crisis is in the offing. Most types of extreme weather events are not getting worse.
The only thing keeping the “climate crisis” narrative afloat this long is the influence of wealthy elites in Western nations and the power-hungry politicians beholden them who keep pouring taxpayers money into the climate scheme for the purposes of gaining power by trying to control energy. Eventually, the climate panic will end. The Soviet Union was considered even more permanent than the United States and the Western capitalist model, for at least two generations. Yet it fell, like the climate crisis will, because the “science” of communism and socialism was as fraudulent as the “science” that says humans are causing a climate catastrophe.
Reason #692 why housing is a pain in the butt
The city is going to repave my street so they scraped a layer off to prepare for it. In doing so they must have disturbed something because on monday the trash track sank into the street right where the sewer line connects. The house backed up and back filled the sump for the washer in the basement and when it kicked off, ugly things started coming up all over the place. As if that is not bad enough now it is endless phone calls and meetings to figure out who is going to take responsibility for it and fix it. I’m not allowed to dig up the street myself so I have to convince a city entity to repair it. As it stands currently, the wastewater utility has run a camera up the main line and determined that the lateral connection is fine. The problem is they can only see up the lateral 1-2 feet and the crushed part is about 3-4 feet from the main line under the street and is considered my problem to prove before they will do anything. Fun times. I’m guessing they will finish paving the street the day before they decide to dig it all up and fix my pipe. FML.
Your problem to prove? Like a hole in the street isn’t proof enough?
I guess your only option is to run a camera down from your end of the sewer pipe to locate the actual blockage and to prove that the damage is still under the street and not under your property. Yikes.
The camera is supposed to be here later today.
They repaved this morning. Progress?
Hurricane Idalia: Residents rescue each other near Florida’s Crystal River as water levels rise
FOX 35 Orlando
1 hour ago
Water levels in Crystal River neighborhoods in Florida are continuing to rise following Hurricane Idalia’s landfall. As Florida heads into high tide over the next couple of hours, the water levels are expected to rise again. Residents say there are snakes, sewage floating above the waters
https://www.youtube.com/watch?v=zkkKH1ndABo
7 minutes.
Sen. McConnell freezes again at Kentucky event
https://www.msn.com/en-us/news/politics/sen-mcconnell-freezes-again-at-kentucky-event/ar-AA1g0fKK
That he, Feinstein and Fetterman hold 3 of 100 Senate seats is absolutely horrifying. McConnell’s aide clearly knows this isn’t right.
If he were a fountain of goodness and wisdom, I’d put up with the petite seizures, no problem. We have a multitude of more energetic senators who are vile. That’s a real problem.
AFAICT, McConnell controls the purse strings for any RINO getting a Senate seat.
That Buzzfeed article on calling off the wedding is wild! Of the 17 stories, only 2 of them looked like they would have worked out. #17 did work out, and I believe #9 could have been worked out. The rest dodged bullets.
I played our wedding video backward yesterday. It really cheered me up to see how I take the ring off my wife’s finger, get out of the church and go drinking with my best friends.
From a friend.
🤣
I’m admittedly not a proponent for marriage. It took a missed miscarriage and an ectopic pregnancy to convince me that maybe I should marry the guy. At which point, we eloped.
‘the hit to public finances — and therefore to the government’s coffers — is two-fold. ‘On one hand, QT loses money because the Treasury takes the BoE’s losses when gilts are sold at a lower price than paid. This was expected: the BoE bought bonds in a falling rate environment due to disinflation, while ‘success’ was to be defined by reflation and so higher rates…On the other hand, though, while QE gilts are not sold, the BoE pays Bank Rate on the ~£900bn reserves it created to buy them. The higher Bank Rate rises, the more costly this interest expense becomes’
Imogen, I don’t see success anywhere in what you said.
‘Now the debts are hanging in the air. Some big companies are too big to fail, but it’s leading to their suppliers being dragged to death’
The big are failing Yao and their suppliers being dragged to death. Booms always turn out this way.
Things Aren’t Looking Too Good For Sellers In Brampton, Mississauga & Durham Real Estate – Aug 23
Team Sessa Real Estate
9 minutes ago CANADA
Brampton, Mississauga, Ajax, Whitby, Pickering Real Estate Market Report for the week of Aug 17 – Aug 23, 2023.
https://www.youtube.com/watch?v=oZxlgEFqHuY
11:19.
Have pets? Don’t be stoopid!
So BOE has twin pronged problem of selling gilts below the price they bought and to rub salt into the wounds, pay higher interest on the gilts till they sell. Isn’t the Fed in the same boat? Does anyone know if FRED publishes data on the maturity dates of the treasuries they own?
Looks like the end game is Argentina.
A historic 15 minute video (historic in that it is a week old):
Watch “It’s Over: China’s Economy Is Finally Collapsing” on YouTube
https://youtu.be/gJOGsK0kKxo?si=XffBdRtuRuhLJxQY
The guy in this 15 minute video looks over the fine print in Zillow’s One Percent Down offer:
Watch “The Housing Market Is In Serious Trouble” on YouTube
https://youtu.be/u3tQ2iY6go0?si=M59wIpdDmr8eniVk
(Remember: What the large print first giveth the fine print then taketh away.)
Marvin Gaye — Trouble Man:
https://www.youtube.com/watch?v=6kduvcqx-BU
For those who need a laugh …
https://www.facebook.com/story.php?story_fbid=pfbid0jHJk3Ra3Ui6Y9GD6iGdpNUKjNMbVFMb7nBirLaNFicKhWxyA87rf6sov78haqwHcl&id=100083408883443&post_id=100083408883443_pfbid0jHJk3Ra3Ui6Y9GD6iGdpNUKjNMbVFMb7nBirLaNFicKhWxyA87rf6sov78haqwHcl&mibextid=Nif5oz
Biden is again saying that ” White Supremacy” is the biggest terrorist threat.
Well Biden, who are these White Supremacy terrorist, and who are they threatening? You not talking about white citizens who go to church, vote Republican, and don’t want transgenders assaulting their kids are you. Do you mean the group that loves the USA, doesnt want border invasion, who doesnt want guns or their free speech or Constitutional protections taken, is that the group your talking about?
Or is it just your political opposition that is the greatest threat to you leading in a One World Order treason against USA.
You are right that the biggest terrorist threat, actually to the World, is a Cult called the WEF, that are mostly WHITE and they think they are Supreme . Rothschilds, Bill Gates, George Soros, Rockerfellers, are all white . But your one of them Mr President, and your White and your a treasonous crook and a terrorist .
We’re witnessing a Marxist infiltration/insurgency. I advise lowering your blood pressure until enough of the population clue into this.
That didn’t nest where I meant it to.
Neither did that one. Damn!
Testing nesting.
Economy
‘Shark Tank’ investor Kevin O’Leary says it’s weird there’s no recession yet – and predicts mortgage rates will exceed 8%
Theron Mohamed
Aug 31, 2023, 2:24 AM PDT
Kevin O’Leary. REUTERS/ Gus Ruelas
– Kevin O’Leary finds it surprising that the US economy has avoided a recession so far.
– The “Shark Tank” investor expects interest and mortgage rates to rise further.
– Low unemployment and the remote-working trend are fueling demand for rentals and homes, he says.
Kevin O’Leary had a mix of good and bad news for Americans in a recent interview. The US economy has managed to escape a recession so far — but mortgage rates are headed higher in the months ahead, he said.
“We have this weird situation in America, we’re at full employment,” the “Shark Tank” investor told Fox News. “We have not yet seen the full impact of what should be, and has been called for for months, a recession.”
“There is no recession in America yet,” he continued. “It’s the strangest of times and that’s why you should keep some of your powder dry,” he added, meaning that people should keep some cash on the side.
Inflation spiked as high as 9.1% last summer, spurring the Federal Reserve to raise its benchmark interest rate from almost zero last spring to as high as 5.5% today. The central bank’s hikes have helped to slow price growth to around 3% in recent months, and Fed Chair Jerome Powell has signaled further increases in the months ahead.
“He is going to stay vigilant until inflation’s at 2%,” O’Leary said. The TV star — whose nickname is “Mr. Wonderful” — warned interest rates are on track to hit 6% at least, pushing mortgage rates from about 7% today to above 8%. Housing loans won’t get cheaper anytime soon, he predicted.
…
https://www.businessinsider.com/kevin-oleary-shark-tank-us-economy-recession-housing-mortgages-rates-2023-8
I read yesterday that San Diego home price inflation is still running hot with 7.5% 30-year mortgage rates. I wonder if 8% rates would suffice to send the investor horde a packing?
Banking
The Triple Punch of Monetary Tightening on US Mortgage Rates
August 28, 2023
By Prof. Viral V. Acharya, C.V. Starr Professor of Economics, Department of Finance, New York University Stern School of Business (NYU-Stern), and Satish Mansukhani, Managing Director, Investment Strategy, Rithm Capital
Since the onset of the Federal Reserve’s (the Fed’s) monetary tightening in 2022, the 30-year fixed mortgage rate in the United States (US) has gapped out to 7 percent. Around 300 basis points (bps) at present above the 10-year US Treasury yield (see Figure 1), this spread has historically been stable at around 200 bps; this was the case even during the pre-pandemic interest-rate hikes (2016-19) and quantitative tightening (QT, 2017-20) episodes.
Why is this time different?
We explain below that the current break from this trend is caused critically by the interplay of the Fed’s and domestic banks’ balance sheets. Changes in the risk appetites of institutional investors (bank and non-bank) and the profitability considerations of mortgage lenders have combined with this interplay to produce an unprecedentedly fast and amplified passthrough of monetary tightening to mortgage rates.
Deconstructing the 30-year mortgage rate
…
https://internationalbanker.com/banking/the-triple-punch-of-monetary-tightening-on-us-mortgage-rates/
Low unemployment
Cooked numbers for initial headlines followed by large downward revisions.